Advertisements
Advertisements
Question
Distinguish between Autonomous transactions and Accommodating transactions.
Advertisements
Solution
| Basis of Difference | Autonomous Transactions of BOP |
Accommodating Transactions of BOP |
| Meaning |
Those foreign transactions done by a country having an economic goal, such as earning income or profit. |
Those international transactions are done to achieve balance of payment (BOP) equality. |
| Undertaken by whom | The private sector carries these out. | A country's apex monetary body carries these out. |
| Example | McDonald outlet in India. | Loan taken by RBI from IME. |
RELATED QUESTIONS
Why is the open economy autonomous expenditure multiplier smaller than the closed economy one?
Calculate the open economy multiplier with proportional taxes, T = tY, instead of lump−sum taxes as assumed in the text.
Suppose C = 40 + 0.8Y D. T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y
a) Find equilibrium income
(b) Find the net export balance at equilibrium income
(c) What happens to equilibrium income and the net export balance when the government purchases increase from 40 to 50?
In the above example, if exports change to X = 100, find the change in equilibrium income and the net export balance.
Answer the following question.
Define "Trade surplus". How is it different from "Current account surplus"?
Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely ______.
BoP is measured as ______.
Accommodating items are those items of Bop which ______.
Disequilibrium in balance of payments means ______.
Which of the following had been responsible for the heavy burden of the deal and its interest?
The balance of trade shows a deficit of ₹5,000 crores and the value of imports are ₹9,000 crores. What is the value of exports?
The balance of trade shows a deficit of ₹300 crore. The value of exports is ₹500 crore. What is the value of imports?
Considering operating surplus which one of the following is not a part of it?
Assertion (A): The Balance of payments is in surplus, if autonomous receipts are greater than autonomous payments.
Reason (R): Autonomous transactions are determined by the difference in the Balance of Payments.
‘Current account deficit in an economy must be financed by a corresponding capital account surplus’.
Do you agree with the given statement? Give valid reason(s) in support of your answer.
'Deficit' in Balance of payment (BOP) refers to the excess of ______.
